Dalal Street Investment Journal - - QUERYBOARD -

I bought 500 shares of Nitin Fire at ₹27. Should I hold or exit? - Chetan Me­hta

Nitin Fire Pro­tec­tion In­dus­tries Limited is a Mum­bai head­quar­tered com­pany with busi­ness in­ter­est in cylin­ders, fire pro­tec­tion, detection equip­ment and fire fight­ing project-trad­ing. The com­pany man­u­fac­tur­ers fire­fight­ing equip­ments (gas-based and water-based fire ex­tin­guish­ers), pro­vid­ing turnkey so­lu­tions and main­te­nance con­tracts for fire pro­tec­tion sys­tems. On the fi­nan­cial front, Nitin Fire Pro­tec­tion In­dus­tries Ltd rev­enue fell sharply from ₹41.47 crore in Q4FY16 to a neg­a­tive ₹173.06 crore in Q4FY17, a mas­sive drop of 517 per cent. The com­pany’s prof­its be­fore in­ter­est, de­pre­ci­a­tion and tax (PBIDT) dropped mas­sively by 1881 per cent to a loss of ₹77 crore in Q4FY17 on a yearly ba­sis. The com­pany’s profit af­ter tax dropped by 1286 per cent to a net loss of ₹96.61 crore in Q4FY17 on a yearly ba­sis. On an an­nual ba­sis, the com­pany’s rev­enue dropped by 41.62 per cent to ₹268.74 crore in FY17 from ₹460.36 crore in FY16. The com­pany’s PBIDT also dropped from ₹38.13 crore in FY16 to a neg­a­tive ₹52.26 crore in FY17, a huge de­cline of 237 per cent. The com­pany posted a net loss of ₹96.42 crore in FY17 with its net profit drop­ping by 1872.43 per cent on a yearly ba­sis. The price of the stock has been earth­bound, while the stock does not ex­hibit any sig­nif­i­cant sign of re­cov­ery. We rec­om­mend the reader-in­vestors to Exit the stock.

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